Three certainties

Question 1

What are the three certainties?

Answer 1

• certainty of intention
• certainty of subject matter
• certainty of objects

Question 2

What is the requisite intention for certainty of intention?

Answer 2

intention to assume/impose a duty which is a characteristic of a trust

Question 3

How can an intention to create an express trust be shown?

Answer 3

By words or conduct

Question 4

What approach do courts use when ascertaining an intention to create an express trust?

Answer 4

Objective

Question 5

What can be a good indicator (but not conclusive) of an intention to create a trust?

Answer 5

• use of word trust
• segregation of funds

Question 6

What element is likely to show no intention to create a trust?

Answer 6

Vagueness

Question 7

What are the two requirements for certainty of subject matter?

Answer 7

• Trust property requirement
• Beneficial entitlement requirement

Question 8

When may it be difficult to identify trust property?

Answer 8

• identified by description
• identified out of a larger mass

Question 9

Is there certainty of subject matter where the trust property is a fractional interest?

Answer 9

Yes

Question 10

Is there certainty of subject matter where the trust property is a a specific number of items out of larger mass?

Answer 10

Yes if which ones are identified

Question 11

When can a trust not be formed where the property is identified as a specified amount of a larger bulk?

Answer 11

Tangible assets

Question 12

When can a trust be formed where the property is identified as a specified amount of a larger bulk?

Answer 12

Intangible, fungible assets

Question 13

Is ‘reasonable income’ sufficient to show beneficial entitlement?

Answer 13

Yes

Question 14

When may there be no certainty of beneficial entitlement?

Answer 14

Where there is a decider - they may die/become unable to choose

Question 15

Which type of trust needs the most certainty of objects?

Answer 15

Fixed trusts

Question 16

Will a fixed trust fail if there are multiple beneficiaries and some are uncertain beneficiaries?

Answer 16

No - where a beneficiary’s interest doesn’t rely on an uncertain beneficiary, they can still take their interest

Question 17

What is the complete list test?

Answer 17

Where trustees required to distribute property equally between a class of beneficiaries, must be able to draw up a complete list of beneficiaries

Question 18

What are the two further certainty requirements where the complete list test is involved?

Answer 18

• conceptual certainty: language used to describe class
• evidential certainty: evidence to enable identification

Question 19

What certainty test is required for powers of appointment?

Answer 19

Certainty of objects - whether someone is/is not a member of the class

Question 20

What are the certainty of objects tests requirements for discretionary trusts?

Answer 20

Carry out a survey of class depending on size
* No need for complete list – is/is not test satisfies
* Conceptual certainty still a requirement

Question 21

What was the test in Re Baden regarding whether someone was a beneficiary of a discretionary trust?

Answer 21

If they can’t prove they’re within the class, they are considered outside of it

Question 22

When may a discretionary trust fail due to the class of objects?

Answer 22

Administrative unworkability if the class is too wide

Question 23

What is the consequence where the three certainties are not satisfied and the property has not been transferred, for an inter vivos arrangement?

Answer 23

No change in beneficial ownership

Question 24

What is the consequence where property has been transferred to a trustee but there is no certainty of intention to create a trust, for inter vivos arrangements?

Answer 24

Presumed resulting trust (unless presumption can be rebutted)

Question 25

What is the consequence where property has been transferred to a trustee and there is certainty of intention to create a trust, for inter vivos arrangements?

Answer 25

Automatic resulting trust

Question 26

What is the consequence for testamentary arrangements where there is no certainty of intention to impose a trust?

Answer 26

Gift

Question 27

What is the consequence for testamentary arrangements where there is certainty of intention but no certainty of subject matter or objects?

Answer 27

Provision fails and property falls into residue